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Credito


The Credito was a local currency started on 1 May 1995 in Bernal, province of Buenos Aires, Argentina, on a garage sale, which was the first of many neighbourhood barter markets (mercados de trueque) that emerged in Argentina during the economic crisis.

The operator of this currency was the Red Global de Clubes de Trueque Multireciproco (RGT),

literally "Global Network of Multi-Reciprocal Exchange Clubs" or more simply the "Global Exchange Network" (GEN).

The currency started as a Local Exchange Trading Systems (LETS) system but was soon replaced by a number of printed currencies and, after further experimentation with a LETS called nodine , finally became the Credito, a printed currency again.

The RGT was organized as a chaordic network of barter clubs, which had a clientele from a well educated middle class that had fallen into unemployment during the Argentine recession of the late 1990s.

The clubs of the RGT had no central organ, no central administration and no legislation. Clubs decided for themselves to accept the Creditos of other clubs and not all clubs issued their own Creditos. Clubs that did usually issued between 30 and 50 Creditos per participant. In a later phase some of the clubs joined zones or networks and zones became the issuers of Creditos instead of individual clubs. The chaordic structure allowed the system to grow quickly but also left the system vulnerable to fraud.

The Credito was an interest-free currency and was pegged to the Argentine peso, which in turn was pegged to the U. S. dollar at the time. An estimated $400 million in goods and services were traded in 2000. A survey conducted by members of the economics department of Harvard University reports a personal exchange rate of about two Creditos for one peso during 2002-2003 by individuals who offered goods or services in both currencies.

By July 2002 the unemployment rate in Argentina was in excess of 20% and approximately 7% of the population participated in the RGT. Argentina had already had a high unemployment rate of about 17% for six years previously.

The system was used all over Argentina and worked reasonably well for a time but, as things worsened in the formal economy, more and more people joined the RGT clubs, and a growing percentage of people spent their Creditos without offering sufficient skills or trade in return. The system suffered

from hyperinflation and from counterfeiting. Between 2002 and 2003 the government made unemployment insurance available to 2.5 million people, compared to 0.2 million people previously, and thereby increased the availability of the peso to the population stratum using the Credito, which had an 89% preference for Pesos over Creditos.

Other complementary currencies in Argentina at that time were the Patacon, the LECOP and the Argentino. The Argentino was never implemented.

References

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External links

Alternative Currencies in Argentina

User-created currencies in Latin America

To Weather Recession, Argentines Revert to Barter

Argentina: The Post-Money Economy

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This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article Credito


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